Yugoslavia Table of Contents
Beginning in the 1960s, Yugoslavia earned considerable hard currency income from so-called "invisibles": remittances from Yugoslav guest workers working abroad, and from tourists visiting from countries whose currency was convertible into dinars. These remittances were important to the Yugoslav budget, particularly in the mid-1970s when they bridged the gap in the import-export balance and produced surpluses in the balance of payments. Beginning in the early 1970s, changes in financial laws encouraged Yugoslavs working abroad to deposit foreign currency savings in Yugoslav banks. Remittances, which averaged US$2 billion in the late 1970s, became the richest source of hard currency income for the Yugoslav economy. In the late 1980s, unofficial hard-currency income played a visible role in stimulating activity such as construction of private housing. Through 1990, about 375,000 workers had invested in Yugoslav firms after returning, and another 160,000 had started private business.
Yugoslavia was already an exporter of surplus labor before World War II. The Tito government actively discouraged that practice until the early 1960s, however, when growing unemployment altered official policy. Beginning with the reform of 1965, government policy encouraged workers to go abroad. In 1981, there were 875,000 Yugoslavs working abroad, mostly in West Germany and Austria (see Guest Workers , ch. 2).
Generally speaking, heavy reliance on tourism is not wise policy for a developing country, because that industry is highly sensitive to seasonal fluctuations and uncontrollable economic and political events. But from 1961, when one million tourists visited Yugoslavia, the figure increased steadily to over nine million in 1988, under government support for the tourist industry that began in the early 1960's. Besides its monetary contributions to the national balance of payments, tourism produced a quick return for those employed in the hotel, restaurant, and service industries. In real terms, income in those industries increased by about 1.7 times between 1965 and 1988. Tourism also stimulated the building, transportation, food manufacturing, and handicrafts industries.
Data as of December 1990